What is the cost of racism?
Racial disparity in American economic life is reflected in the deep, broad, persistent inequality in employment, income, and wealth, which significantly diminishes the quality of life for African Americans.
It has been so since Black people were first brought to this country as slaves. After emancipation, they were denied capital and land ownership, and subjected to violence after the brief period of reconstruction as the Southern states adjusted to a new social order with 4 million free men and women of color. Jim Crow emerged, with de jure racial segregation in the South, and racial discrimination in other sections of the country. These conditions created major racial disparities in income, employment, and wealth that became embedded in the social and cultural exchange between Black people and other groups in the American population.
The general impact is that it diminishes the quality of life, and it creates major social and psychological damage to Black families.
It creates a number of outcomes that are undesirable. The life expectancy of Black people is shorter than it is for white people, and that has significant impacts on health care. There are wide ranges of impacts as a result of racial inequality in America.
What does this actually mean for Americans’ wallets?
Racial economic disparities reduce economic growth, measured by gross domestic product, (GDP)— the money value of all goods and services produced in the U.S. GDP is determined by consumer spending (two-thirds), business investment, government spending, and net exports. The racial income disparity reduces Black family consumer spending, and also reduces savings, which is the source of investment. Investment is the foundation for building wealth. Thus, the inability for Black people to participate fully in the economy reduces total national income. A recent estimate by economists put the value of the foregone income at an average of $4 trillion.
How do you think American life would look and feel differently if our politics were not so divided by race, if people were all voting as a different kind of economic block?
I think we would have more progressive policies, and American life would not be hampered by the scourge of white supremacy. White supremacy is so deeply embedded in the fabric of American life that it influences unconscious behavior. If race is taken out of the mix, economic interests reflected in the distribution of income would dominate voting behavior and public policy.
How can we prosper together?
As the economy grows, the rising tide will lift all boats, if there is general equal opportunity. All groups will prosper based on their energy, hard work, and aspirations for building a better life for their family. Those who work hard and play by the rules will prosper. They will not be held back because of their race.
What must be done to allow us to prosper together is eliminate the discrimination and create an environment of genuine equal opportunity. That means every person in the labor market should have an equal opportunity to be employed in an occupation for which they qualify based on their education, training, and previous work experience without regard to their race. Moreover, each employee should be paid wages based on their occupation, should be promoted based on their on the job training and performance, and given equal benefits based on their length of service—all determined without regards to race. Obviously, equal opportunity to get a quality education must precede entry into the labor market. Observance of those conditions would align the practice of America with the promise of America.
